Lawyer accused of misappropriating funds

Attorney with financial advice radio show faces disciplinary complaint, lawsuits

Kathleen Niew's career seems to be a smashing success. An author, attorney and seminar speaker, she lives in a million-dollar home and hosts a financial advice show on WIND-AM 560.

But the self-styled expert is facing legal and financial obstacles of her own.

The Attorney Registration and Disciplinary Commission filed a complaint against Niew that echoes a lawsuit alleging the Oak Brook attorney misappropriated more than $2 million from a couple who entrusted her with their life savings. A Tribune examination of court and regulatory records reveals other troubles:

•The state last week revoked Niew's license to sell insurance.

•Lawsuits allege she improperly took hundreds of thousands of dollars from other clients and failed to disclose insurance commissions.

•After a bankruptcy official accused Niew of trying to "hinder, delay or defraud" her client's creditors, she paid a $43,500 settlement.

In 2001, Niew's law license was suspended for nine months based on a finding that she forged signatures. And going back to 1989, she was disciplined by the state for falsely stating that she was not already married to someone else when she wed her current husband.

Niew, who did not respond to requests for comment, has not been charged with a crime. But legal documents show the 56-year-old Burr Ridge woman is facing some of the most serious allegations of her career. In 25 years of running a small business, Jamal and Leda Khoury, of Oak Park, say they managed to save about $2.5 million. They planned to use the money to invest in multiunit apartment buildings.

According to a lawsuit they filed last fall against Niew, she agreed to represent them as their attorney in 2010. The next year, the suit stated, Niew persuaded them to transfer $2.3 million into trust accounts she oversaw.

The Khourys made several attempts to buy property in 2012, but each time Niew told them there was a problem, and the deals fell through, the lawsuit says.

By September, the Khourys said, they finally closed on a deal to purchase three suburban buildings. But after the closing, their suit states, Niew informed them that the transfer of funds for the purchase was delayed.

The attorney commission complaint alleges the money was never transferred, and the lawsuit asserts Niew and her firm had removed the money and "used those funds for their own benefit." The Khourys lost virtually their entire investment, the suit claims. That was on top of the more than $20,000 the couple paid Niew in fees for legal services, the lawsuit states.

Jamal Khoury stated he was "shocked" when the deal fell through and was left financially and emotionally "devastated," according to their attorney William Suriano.

In a response to the lawsuit, Niew and her husband Stanley Niew, a labor lawyer at Niew Legal Partners who is also named as a defendant, deny the allegations. Stanley Niew did not return a call for comment.

The Niews say they were the victims of the same crime as the Khourys because the money was diverted from an account controlled by the Niews by an unidentified third party.

Kathleen Niew's response that someone hacked into the account is "patently absurd," the Khourys' court filings say. In their legal filings, the Khourys cite financial documents that they say show $1.5 million of the Khourys' money went to buy a mine for an entity called 79th Street Mining — a company that listed Kathleen Niew as its attorney. Regardless of how the money disappeared, the Khourys argue, the Niews had a duty to protect their nest egg.

The allegations run counter to much of Niew's background and accomplishments.

She attended Hinsdale Central High School, graduated with honors from Northern Illinois University College of Law in DeKalb, and started her own practice in 1984.

She co-wrote two books on financial planning that advocate steps to minimize risk and avoid losing principal.

Even in the 2001 case that led to her nine-month suspension by the Illinois Supreme Court, the attorney commission reported at the time that lawyers and judges familiar with her would testify that her reputation for truthfulness was good. She regularly performed free legal work for needy clients, and she acknowledged that her conduct was inappropriate, accepted responsibility and cooperated with the office, the commission said.

But recent events raise other questions. The Illinois Department of Insurance revoked her license after clients complained of transactions they had not authorized.

She also has faced several other lawsuits. One of Niew's accusers is a Countryside businessman who for decades owned a large steel drum manufacturing factory on Chicago's South Side.

Lester Trilla alleges in a DuPage County lawsuit that Kathleen Niew failed to repay a $500,000 loan after she began to represent him in late 2011.